Journal article offers insight, but questions remain

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Bryant Furlow/New Mexico In Depth

Shannon and Lorraine Freedle, who run TeamBuilders Counseling Services.

A story in the Albuquerque Journal this weekend for the first time offers a rationale for the state’s decision to forward “credible allegations of fraud” against one of the 15 organizations that saw their behavioral health Medicaid dollars suspended by the state in late June.

In addition to the payment suspensions, the administration of Gov. Susana Martinez found “credible allegations of fraud” against each of the 15 organizations that serve New Mexicans struggling with issues like mental illness and drug addiction and forwarded the cases to Attorney General Gary King for criminal investigation.

Until the Journal story, the Martinez administration and King’s office had repeatedly refused to publicly disclose the audit or portions of it, again and again saying it is exempted from public disclosure because of King’s criminal investigation.

That resistance seems to have stopped Sunday. Following weeks of not disclosing the audit, its findings and recommendations to New Mexico In Depth and other media outlets by citing the sanctity of the investigative process, someone with access to the full audit report appears to have leaked parts of it to the Journal.

Why?

Apparently quoting from officially-undisclosed portions of the audit, the Journal writes of Santa Fe-based TeamBuilders Counseling Services, Inc. The nonprofit that provides Medicaid-funded services to children and families “made lease payments of more than $3.3 million from 2006 through 2011 to limited liability companies owned in full or part by the Freedles and other TeamBuilders’ officers,” the Journal says.

The Journal goes on:

“‘While prosperous from its state contracts, Teambuilders (sic) does not own a single piece of real estate that it occupies. Teambuilders (sic) has essentially built a sizable real estate portfolio for its officers,’ says the audit commissioned by HSD.”

A few paragraphs later, the language in the Journal story shifts, and that shift is intriguing. The Journal story says the audit:

“…recommended that the lease payments to the limited liability companies be reviewed for conflict of interest, and that officers and directors of TeamBuilders be evaluated for conflict of interest and whether the transactions violate federal regulations or law.

“Because the extent of the officer ownership of the LLCs wasn’t fully disclosed in the documents PCG reviewed, it’s possible that some unrelated parties also got part of that rental income, the audit said.”

The Journal attributes the passages to the HSD-ordered audit report, but they do not appear in the portions of that report that have been officially disclosed by the state to New Mexico In Depth.

An attorney for TeamBuilders called the information as relayed to him by the Journal “grossly inaccurate,” the paper reported.

Who leaked these portions of the audit to the Journal, and why?

Certainly, today’s story offers insight into the state’s reasoning in forwarding a case of “credible allegations of fraud” against TeamBuilders. But what of the 14 other organizations whose payments were suspended and against whom the state lodged “credible allegations of fraud?”

The state has not released detailed information on any of other audited organizations. Why? Perhaps there is additional evidence to support the administration’s reason for finding “credible allegations of fraud” against all 15 organizations? But the public doesn’t know.

Because state officials have refused to publicly disclose the audit, its findings and recommendations, it is unclear what in the audit caused Martinez’s Human Services Department secretary, Sidonie Squier, to find “credible allegations of fraud” against the other 14 organizations or the standard she used to make that determination.

Also unknown is why HSD suspended payments to all 15 organizations without analyzing whether any of the organizations qualified for a good-cause exemption, which federal regulations allow.

Did the state even consider a good-cause exemption for any of the providers prior to suspending payments — perhaps to avoid disruptions or reductions in care that are starting to affect vulnerable children, adolescents and adults around the state?

The state has said it had to suspend payments for any provider under criminal investigation. But federal regulations say a state has discretion here too – a state must suspend payment unless it finds a good cause not to, according to federal regulations. (It’s on page 5932 of the Feb. 2., 2011 edition of the Federal Register, which Deputy General Counsel of HSD, Larry Hayek, cites in a recent legal analysis.)

The unanswered questions don’t end there.

New Mexico In Depth has filed numerous requests seeking all or portions of the audit, its findings as well as recommendations, all of which have resulted in denials, including a refusal last week by the state Human Services Department to turn over the cover page of the audit.

New Mexico In Depth would like to be able to answer some of the questions highlighted above, but so far the Martinez administration and the state attorney general don’t believe the public has the right to know.